July 1 (Bloomberg) -- Gold may be on course to test $1,055
per ounce this year after breaching key support levels on moving
average charts, according to technical analysis by Galaxy
Futures Co.

Moving average lines on monthly charts show bullion is
headed toward the support level after breaching $1,418, said
Jiang Hongyan, a Beijing-based analyst at the brokerage. The
metal is currently oversold and this may hold it around $1,200
before it drops again, she said.

“The moving average convergence-divergence indicator shows
that sentiment is very bearish at the moment, so we may see this
happen in the next six months,” Jiang said. “There seems to be
no momentum for a bounce.”

Gold for immediate delivery rose 0.6 percent to $1,241.43
an ounce at 10:53 a.m. in Shanghai after falling 23 percent in
the second quarter, the worst since at least 1920, according to
data compiled by Bloomberg. The precious metal is poised for the
biggest yearly drop in more than three decades after rising for
12 years in a row.

Technical analysts observe price charts to forecast
resistance levels, or ceilings restricting price increases and
support levels limiting declines. The trading patterns and
prices are used to predict changes in a security, commodity,
currency or index. The moving average convergence-divergence
helps to gauge momentum.